Bets raised in Colorado gambling town
Rocky Mountain News
Cripple Creek, CO Colorado
CRIPPLE CREEK, Colorado ” Excitement over the idea of looser gambling restrictions in Cripple Creek after 17 years of limited stakes has given way to anxiety about the economy.
“We’re hoping for the best,” City Manager Bill McPherson said. “But do people have the money to come and gamble? That’s the question now.”
The residents of Cripple Creek, population 1,100, voted Tuesday to give local casinos the green light to raise minimum bets to $100 from $5, to stay open 24 hours a day and to add craps and roulette. The measure passed easily, 267 to 13.
“Are you kidding me? Only 13 ‘no’s’?” Cripple Creek Mayor Dan Baader said. “It was excellent, as we hoped. Everybody’s looking for very good things to happen.”
Cripple Creek was the first of Colorado’s casino communities to vote on expanding gambling. Statewide voters passed the measure known as Amendment 50 on Election Day, allowing residents of former mining towns to decide if they want to relax the rules.
The leap to higher stakes, which would not take effect until July, is expected to raise revenue and make the towns more attractive destinations.
The state’s community colleges are counting on that impact, too, as they will receive more than three-quarters of the additional gambling tax revenue.
“We’re looking for a shot in the arm,” said Marc Murphy, who oversees Bronco Billy’s, one of the original casinos in town. “Colorado has suffered from an inability to compete on a level playing field with other jurisdictions across the United States.”
Still, it’s uncertain how much the towns will be able to capitalize on the new rules if adverse economic conditions persist throughout the new year.
“This is the worst I’ve ever seen the industry, especially in the last quarter,” said Murphy, who started the casino with his business partner in 1991.
A smoking ban, high gas prices early in the year and a slumping economy have hurt Colorado’s casinos in 2008 – pushing gambling revenue down 12 percent through the first 10 months – and conditions have deteriorated even further since. The Imperial Casino Hotel recently filed for Chapter 11 bankruptcy protection and, in another sign of the times, the Wild Horse Casino closed.
Bronco Billy’s has cut wages and some benefits but has not laid off any staff, Murphy said.
Cripple Creek has not fared quite as badly overall as the state figures, reporting a 9 percent drop in casino revenue through the end of October. November figures should be ready today.
Responding to the tough economy, the city has sliced its 2009 budget to $14 million from $17 million this year, according to McPherson.
Despite the harsh economic climate, an increase in gambling activity likely will provide a lift, creating jobs and driving revenue higher for the casinos and city.
“Amendment 50 is not the silver bullet for us,” said Kevin Werner, general manager of the Wildwood Casino, which opened last spring. “We think it will increase our revenue by about 10 percent. That will not get us back to where we were, but it will certainly help. Hopefully, it will give us some momentum.”
Cripple Creek has at least eight vacant casino spots in town, but so far McPherson said he is not aware of any formal interest in developing one of those properties.
Black Hawk residents will vote Jan. 13, and Central City will hold its election Jan. 20.
Casinos, mostly owned by corporations based in Las Vegas, spent more than $7 million promoting Amendment 50 in the weeks leading up to the election. Critics had expressed worries about the measure opening the door to further expansion of gambling, and they predicted an increase in bankruptcies, crime and other problems.
The Colorado Legislative Council had estimated that the initiative could generate $300 million in extra tax revenue over the first five years, but that outlook has surely changed as the economy has weakened.
The Colorado Springs Gazette contributed to this report.